MGT301 - Principles of Marketing - Lecture Handout 35

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Lesson overview and learning objectives:

Discuss the role of a company’s salespeople in creating value for customers and building customer relationships. Today, most companies use salespeople to bring their company’s offering to the consuming or business publics. The salesperson’s role is a key one in the organization. The high cost of maintaining a sales force means that management is especially interested in how to efficiently organize this vital element.

PERSONAL SELLING

A. Personal selling

The direct presentation of a product to a prospective customer by a representative of the selling organization is termed as personal selling. Personal selling is the personal communication of information to persuade somebody to buy something. Personal Selling occurs when a company representative comes in direct contact with a customer in order to inform a client about a good or service to get a sale. Personal selling is especially important for business-to-business marketers since products and services are complex and expensive. In many companies, personal selling is the largest single operating expense.

a. The Nature of Personal Selling

Selling is one of the oldest professions in the world. Today, most salespeople are well-educated, well-trained professionals who work to build and maintain long-term relationships with customers. They build these relationships by listening to their customers; assessing customer’s needs, and organizing the company’s efforts to solve customer problems. The term salesperson covers a wide variety of positions and responsibilities. The person can be:

  1. An inside order taker.
  2. An order getter (a great amount of creative selling skills are demanded in this position).

Personal selling is likely to be emphasized in a promotional mix when the market is concentrated or the product has a high unit value, is technical in nature, and requires a demonstration. It is also useful if the product can be tailored to an individual customer’s need, or the product is in the introductory stage of the product life cycle.

b. The Role of the Sales Force

Personal selling is the interpersonal arm of the promotion mix. Sales people represent the company to the customer and act as an intermediary linking the customer to the company.

c. Salespeople.

Salespeople act for a company and perform one of more of the following: prospecting of new business; communicating with potential and existing customers; servicing customers and information gathering. Sales positions range from: delivering product; taking orders; building goodwill or educating customers; positions where technical knowledge is required; and creative selling.

d. Sales management.

Sales management involves the analysis, planning, implementation and control of sales force activities. Advertising consists of one-way, non-personal communication with target customer groups while the personal selling involves two-way, personal communication between salespeople and individual consumers. Personal selling can be more effective than advertising in more complex selling situations. The role of personal selling varies from company to company. Some firms have no salespeople at all. The sales force serves as a critical link between a company and its customers. The salesperson can represent both buyer and seller i.e.

  1. They represent the company to the customer.
  2. They represent customers to the company.

Salespeople are becoming more market-focused and customer-oriented.

  1. The old view was that salespeople should be concerned with sales and the company should be concerned with profit.
  2. The new view is that salespeople should be concerned with more than just producing sales—they must know how to produce customer satisfaction and company profit.

Personal selling is performed by person-to-person dialogue between prospective buyer and the seller through direct human contact for matching products to needs. It involves developing relationships between buyer and the seller to discover the needs of the customers/buyers and the benefits of the products that can satisfy the needs of customer can be communicated to customer.

e. The characteristics of personal selling

Personal selling is having flexibility of system it provides one to one contact between the buyers and sellers. It Identify specific sales prospects the first step in the selling process is prospecting identifying qualified potential customers. Approaching the right potential customers is crucial to selling success. Direct contact with the potential buyers provides opportunity to demonstrate the product and to customers and to answer the queries and questions of the customers. Answer questions during the presentation step of the selling process, the salesperson tells the product "story" to the buyer, showing how the product will make or save money. The salesperson describes the product features but concentrates on presenting customer benefits. Using a need-satisfaction approach, the salesperson starts with a search for the customer's needs by getting the customer to do most of the talking. During demonstration there can be certain objections raised by the customers, which can be overcome at very same time. Customers almost always have objections during the presentation or when asked to place an order. The problem can be either logical or psychological, and objections are often unspoken. In handling objections, the salesperson should use a positive approach, seek out hidden objections, asks the buyer to clarify any objections, take objections as opportunities to provide more information, and turn the objections into reasons for buying. Every salesperson needs training in the skills of handling objections.

f. Builds Relationships

The principles of personal selling as just described are transaction oriented—their aim is to help salespeople close a specific sale with a customer. But in many cases, the company is not seeking simply a sale: It has targeted a major customer that it would like to win and keep. The company would like to show that it has the capabilities to serve the customer over the long haul in a mutually profitable relationship.
Most companies today are moving away from transaction marketing, with its emphasis on making a sale. Instead, they are practicing relationship marketing, which emphasizes maintaining profitable long-term relationships with customers by creating superior customer value and satisfaction. They are realizing that when operating in maturing markets and facing stiffer competition, it costs a lot more to wrest new customers from competitors than to keep current customers.
Today's customers are large and often global. They prefer suppliers who can sell and deliver a coordinated set of products and services to many locations. They favor suppliers who can quickly solve problems that arise in their different parts of the nation or world, and who can work closely with customer teams to improve products and processes. For these customers, the sale is only the beginning of the relationship.

Unfortunately, some companies are not set up for these developments. They often sell their products through separate sales forces, each working independently to close sales. Their technical people may not be willing to lend time to educate a customer. Their engineering, design, and manufacturing people may have the attitude that "it's our job to make good products and the salesperson's to sell them to customers." However, other companies are recognizing that winning and keeping accounts requires more than making good products and directing the sales force to close lots of sales. It requires a carefully coordinated whole-company effort to create value-laden, satisfying relationships with important customers.
Relationship marketing is based on the premise that important accounts need focused and ongoing attention. Studies have shown that the best salespeople are those who are highly motivated and good closers, but more than this, they are customer problem solvers and relationship builders. Good salespeople working with key customers do more than call when they think a customer might be ready to place an order. They also study the account and understand its problems. They call or visit frequently, work with the customer to help solve the customer's problems and improve its business, and take an interest in customers as people.

g. Basic Sales Tasks

Basic Sales Tasks

Order Getting: It is creative selling ad is more time consuming. It is used for selling products to new prospects (pioneers) and to sell to continuing customers (account managers). Some times telemarketing is used particularly to small accounts for seeking customers, analyzing their problems, Discover solutions and finally selling solutions to customers. Order Taking: This task is related with very little creative selling, used for Write up of orders, for checking invoices for accuracy, to assure timely order processing and may use suggestive selling for different problems that is supporting the
customers in acquiring solution for problem.

h. The advantages of personal selling

The advantages of personal selling over the other promotion tools…

  • It can be adapted for individual customers.
  • It can be focused on prospective customers.
  • It results in the actual sale, while most other forms of promotion are used in moving the customer closer to the sale.

i. The disadvantages of personal selling

  • The major disadvantages of the personal selling are:
  • Expensive per contact
  • Many sales calls may be needed to generate a single sale
  • Labor intensive
  • It is costly to develop and operate a sales force.
  • It may be difficult to attract high-caliber people.

j. Types of the personal selling

There are two types of personal selling:

The customers come to the salespeople.

Mostly involves retail-store selling. Most salespeople fall into this category.

The salespeople go to the customers.

Usually represent producers or wholesaling middlemen and sell to business users. Some outside selling is relying more on telemarketing.

k. Characteristics of Professional Selling

Sales reps engage in a total selling job. Reps work closely with customers. Sales reps organize much of their own time and effort. They often experience role ambiguity and role conflict

l. Contributions of Personal Selling to Marketing:

Today, most professional salespeople are well-educated, well-trained men and women who work to build long-term, value-producing relationships with their customers. They succeed not by taking customers in but by helping them out—by
assessing customer needs and solving customer problems. Success in a selling environment requires careful teamwork among well-trained, dedicated sales professionals who are bent on profitably taking care of their customers

Contributions of Personal Selling to Marketing

m. Changing patterns in personal selling

Traditionally, personal selling has been a face-toface, one-on-one situation. But now new trends and patterns are emerging which are:

  • Selling Centers — Team Selling
  • Systems Selling
  • Global Sales Teams
  • Relationship Selling
  • Telemarketing

n. Salesperson Attributes:

Salesperson Attributes

Salesperson is an individual( like: Serving, and Information gathering Salespeople, sales representatives, account executives, sales consultants, sales engineers, agents, district managers, marketing representatives, account development reps, etc) acting for a company by performing one or more of the following activities. Salesperson is an individual acting for a company by performing one or more of the following activities: Prospecting, The first step in the selling process is prospecting— identifying qualified potential customers. Approaching the right potential customers is crucial to selling success. Than during the presentation step of the selling process, the salesperson tells the product "story" to the buyer, showing how the product will make or save money. The salesperson describes the product features but concentrates on presenting customer benefits. Using a need-satisfaction approach, the salesperson starts with a search for the customer's needs by getting the customer to do most of the talking. To be more effective in this process sales person should possess certain attributes, they should be honest should be competent to demonstrate the products and handle objections should be customer oriented so tat customers can be satisfied, should possess the skills so that potential customers are ready to listen about the offered products.

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